Sovereign wealth funds targets selection: A comparison with pension funds

Narjess Boubakri; Jean Claude Cosset; Jocelyn Grira

doi:10.1016/j.intfin.2016.01.004

Sovereign wealth funds targets selection: A comparison with pension funds

Narjess Boubakri, Jean Claude Cosset, Jocelyn Grira

Research output: Contribution to journal › Article › peer-review

44 Citations (Scopus)

Abstract

This paper investigates the determinants of sovereign wealth funds' (SWFs) decisions to invest in publicly traded firms in comparison to pension funds. Using a sample of 344 firms targeted by SWFs over the 1991-2011 period and a control sample of 663 firms targeted by pension funds, we find that SWFs, in comparison to pension funds, are more likely to invest in firms operating in strategic industries as defined by Fama and French (1997) (financial sector, natural resources, mining, transportation, telecommunication and utilities) and in countries with sustainable economic growth and weak legal and institutional environment. Our findings are robust to disproportional size of some SWFs, their financing sources, their transparency level and acquisition activities during the recent financial crisis.

Original language	English
Pages (from-to)	60-76
Number of pages	17
Journal	Journal of International Financial Markets, Institutions and Money
Volume	42
DOIs	https://doi.org/10.1016/j.intfin.2016.01.004
Publication status	Published - May 1 2016

Keywords

Investment strategy
Pension funds
Sovereign wealth funds

ASJC Scopus subject areas

Finance
Economics and Econometrics

UN SDGs

This output contributes to the following UN Sustainable Development Goals (SDGs)

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10.1016/j.intfin.2016.01.004

Cite this

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title = "Sovereign wealth funds targets selection: A comparison with pension funds",

abstract = "This paper investigates the determinants of sovereign wealth funds' (SWFs) decisions to invest in publicly traded firms in comparison to pension funds. Using a sample of 344 firms targeted by SWFs over the 1991-2011 period and a control sample of 663 firms targeted by pension funds, we find that SWFs, in comparison to pension funds, are more likely to invest in firms operating in strategic industries as defined by Fama and French (1997) (financial sector, natural resources, mining, transportation, telecommunication and utilities) and in countries with sustainable economic growth and weak legal and institutional environment. Our findings are robust to disproportional size of some SWFs, their financing sources, their transparency level and acquisition activities during the recent financial crisis.",

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T2 - A comparison with pension funds

AU - Boubakri, Narjess

AU - Cosset, Jean Claude

AU - Grira, Jocelyn

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Y1 - 2016/5/1

N2 - This paper investigates the determinants of sovereign wealth funds' (SWFs) decisions to invest in publicly traded firms in comparison to pension funds. Using a sample of 344 firms targeted by SWFs over the 1991-2011 period and a control sample of 663 firms targeted by pension funds, we find that SWFs, in comparison to pension funds, are more likely to invest in firms operating in strategic industries as defined by Fama and French (1997) (financial sector, natural resources, mining, transportation, telecommunication and utilities) and in countries with sustainable economic growth and weak legal and institutional environment. Our findings are robust to disproportional size of some SWFs, their financing sources, their transparency level and acquisition activities during the recent financial crisis.

AB - This paper investigates the determinants of sovereign wealth funds' (SWFs) decisions to invest in publicly traded firms in comparison to pension funds. Using a sample of 344 firms targeted by SWFs over the 1991-2011 period and a control sample of 663 firms targeted by pension funds, we find that SWFs, in comparison to pension funds, are more likely to invest in firms operating in strategic industries as defined by Fama and French (1997) (financial sector, natural resources, mining, transportation, telecommunication and utilities) and in countries with sustainable economic growth and weak legal and institutional environment. Our findings are robust to disproportional size of some SWFs, their financing sources, their transparency level and acquisition activities during the recent financial crisis.

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KW - Pension funds

KW - Sovereign wealth funds

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Sovereign wealth funds targets selection: A comparison with pension funds

Abstract

Keywords

ASJC Scopus subject areas

UN SDGs

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